CHAPTER 15 "Managing Global Systems"
15.1 The Growth of International Information Systems
Today, the production and design of many electronic products are
parceled out to a number of different countries.
Developing an International Information Systems Architecture
An international information
systems architecture consists of the basic
information systems required by organizations to coordinate worldwide trade
and other activities. The basic strategy to follow when building an
international system is to understand the global environment in which your firm is operating.
A business driver is a force in the environment to which businesses must respond and that
influences the direction of the business.
The Global Environment: Business Drivers and Challenges
The global business drivers can be divided into two groups:
general cultural factors and specific business factors. A global culture created
by television, the Internet, and other globally shared media such as movies now
permits different cultures and peoples to develop common expectations about
right and wrong, desirable and undesirable, heroic and cowardly. A last factor
to consider is the growth of a global knowledge base. The general cultural
factors leading toward internationalization result in specific business
globalization factors that affect most industries.
The new global markets and pressure toward global production and
operation have called forth whole new capabilities for global coordination. Production,
accounting, marketing and sales, human resources, and systems development (all
the major business functions) can be coordinated on a global scale.
Business Challenges
At a cultural level, particularism, making judgments and taking action on the basis of narrow or
personal characteristics, in all its forms rejects the very concept of a shared global
culture and rejects the penetration of domestic markets by foreign goods and
services. Different cultures produce different political regimes. Cultural and
political differences profoundly affect organizations’ business processes and
applications of information technology.
State of The Art
There are significant difficulties in building appropriate international
architectures. The difficulties involve planning a system appropriate to the
firm’s global strategy, structuring the organization of systems and business
units, solving implementation issues, and choosing the right technical
platform.
15.2 Organizing International Information Systems
Global Strategies and Business Organization
Four main global strategies form the basis for global firms’
organizational structure. These are domestic exporter, multinational,
franchiser, and transnational.
The domestic exporter strategy is characterized by heavy centralization of corporate
activities in the home country of origin. The multinational strategy
concentrates financial management and control out of a central home base while
decentralizing production, sales, and marketing operations to units in other
countries.
Franchisers are an
interesting mix of old and new. On the one hand, the product is created,
designed, financed, and initially produced in the home country, but for
product-specific reasons must rely heavily on foreign personnel for further
production, marketing, and human resources. In a transnational strategy, nearly
all the value-adding activities are managed from a global perspective without
reference to national borders, optimizing sources of supply and demand wherever
they appear, and taking advantage of any local competitive advantages.
Global Systems to Fit The Strategy
Information technology and improvements in global
telecommunications are giving international firms more flexibility to shape
their global strategies. The configuration, management, and development of
systems tend to follow the global strategy chosen.
Reorganizing the Business
To develop a global company and information systems support
structure, a firm needs to follow these principles:
- Organize value-adding activities along lines of comparative advantage.
- Develop and operate systems units at each level of corporate activity
- Establish at world headquarters a single office responsible for development of international systems
15.3 Managing Global Systems
A Typical Scenario: Disorganization on A Global Scale
It will be difficult to convince local managers anywhere in the
world that they should change their business procedures to align with other
units in the world, especially if this might interfere with their local
performance. After all, local managers are rewarded in this company for meeting
local objectives of their division or plant.
Global Systems Strategy
- Define the Core Business Processes
- Identify the Core Systems to Coordinate Centrally
- Choose an Approach: Incremental, Grand Design, Evolutionary
- Make the Benefits Clear
The Management Solution: Implementation
- Agreeing on Common User Requirements
- Introducing Changes in Business Processes
- Coordinating Applications Development
- Coordinating Software Releases
- Encouraging Local Users to Support Global Systems
15.4 Technology Issues and Opportunities For Global Value Chains
One major challenge is finding some way to standardize a global
computing platform when there is so much variation from operating unit to
operating unit and from country to country.
Computing Platforms and Systems Integration
The development of a transnational information systems
architecture based on the concept of core systems raises questions about how
the new core systems will fit in with the existing suite of applications developed
around the globe by different divisions, different people, and for different
kinds of computing hardware. However, the problems are magnified in an
international environment. Moreover, having all sites use the same hardware and operating
system does not guarantee integration.
Connectivity
Truly integrated global systems must have connectivity—the ability
to link together the systems and people of a global firm into a single
integrated network just like the phone system but capable of voice, data, and
image transmissions. While private networks have guaranteed service levels and
better security than the Internet, the Internet is the primary foundation for
global corporate networks when lower security and service levels are acceptable.
Software Localization
The development of core systems poses unique challenges for
application software: How will the old systems interface with the new? Aside
from integrating the new with the old systems, there are problems of human
interface design and functionality of systems. To be truly useful for enhancing
productivity of a global workforce, software interfaces must be easily
understood and mastered quickly. When international systems involve knowledge workers
only, English may be the assumed international standard. The entire process of
converting software to operate in a second language is called software localization.
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source: "Management Information System" e-book, 12th edition, written by Kenneth C. Laudon and Jane P. Laudon.